Skip to main content

tv   Squawk Box  CNBC  June 19, 2017 6:00am-9:01am EDT

6:00 am
♪ come and get your love. guardians of the galaxy, we like this song good morning, welcome to "squawk box" on cnbc we are live from nasdaq market side in times square becky quick with joe kerr anyone, andrew off today guest host is mark grant, chief strategist at hilltop securities great to see you. >> great to see you, becky. >> thank you for being here. >> my pleasure. >> a lot to come up. let's quickly look at u.s. he can quit futures they're higher this morning. dow futures up by 70 points. s & p 7.5, overnight in asia markets were mixed take a look. the nikkei up by six-tenths, hang seng up, shanghai up by
6:01 am
7-10ths% green arrows for major in deksz. ftse up. germany, dax up. gains in france after the french election there one of the biggest majorities they've seen in post war france. you can see crude oil markets up slightly still below $45 a barrel following developing story from london, a van plowed into a group of pedestrians outside a mosque injuring ten people it happened as worshippers were leaving evening prayers. metropolitan police say the driver of the van was taken into custody and they're treating the incident as potential act of terrorism. almost one year since britain voted to leave european union. formal brexit talks begin today.
6:02 am
david davis is meeting with eu chief negotiator in brussels that kicks off the process that must be completed by march, 2019 discussions come less than two weeks after prime minister theresa may and her conservative party lost the majority in parliament, adding to further uncertainty when it comes to these talks. and becky alluded to this in other political news in europe, french president emanuel macron central party scoring a victory in yesterday's second round of parliamentary elections, despite low turnout. macron's party has majority in parliament campaign promises, improving france's economy and restoring influence in europe. like a euro party. >> unseated all traditional parties there. >> they do a lot of things that probably aren't the greatest way to necessarily run a country can you imagine us starting a political party within a year
6:03 am
gets majority of, i don't know, other parties are so crappy that just any up start can come up and -- >> this is throw the bums out. >> i know. but can you imagine, we had -- >> i thought you would be into this >> we had wigs, but -- we have the tea party, but don't -- >> look, donald trump is not exactly mainstream republican, brought in a new crowd of people >> right >> not so different. >> i think this gives him because it is a big majority, gives macron the ability to bring in -- >> he was a banker but he was like his mentor was the guy that raised taxes to 90%. but in france, i don't understand anything. >> it is a different mentality >> s >> we'll always have paris
6:04 am
how unhappy are you going to be walking around paris >> look, starts off today quoting humphrey bogart. >> so you know, i don't stick my neck out for anybody just know that >> that little guy, what's his name. >> what was his name -- >> little squirrely guy. >> have to look it up. >> i'm getting old nothing comes right away like it used to, you know what i mean? >> you're still pretty quick you have a memory like nobody i have ever -- >> angari. took me five seconds. >> what's the guy's name name. >> that's the one should be easy >> i'll make sure he is not googling it. >> i may need to go through the alphabet, would
6:05 am
come up with it. in corporate news, shares of british online super market ocado jumping this morning they are considered a takeover target after amazon announced friday it is buying whole foods. right now, let's get to washington we have top political stories. you're doing something with trump's lawyer chris wallace. >> i'm not doing chris wallace bite have the guys dig it up if you want to. it is interesting. >> i'm not sure what to think. i don't know if anybody knows. we hear so many things leaked, then they're not true, then they are true god, i hope there's some collusion somewhere, if we go through all this and there's nothing there, i mean, we're as bad as france. >> talk about obstruction of justice.
6:06 am
>> anyway. >> let me put it in context. >> needs to be a break in. obstruction of justice with nothing there makes no sense go ahead >> before we debate it, update where we stand as of this morning. here's the president's tweet from friday, focus of a lot of attention over the weekend the president on twitter issuing a statement saying i am being investigated for firing fbi director by the man who told me to fire the fbi director, witch-hunt, that's the way the president is describing this investigation into russian meddling in the 2016 election as a witch-hunt he also said i am being investigated in that tweet however, a member of his legal team was on all sunday news shows this weekend and said the president did not mean he was actually under investigation in that tweet here's how he put it on "meet the press." >> the president is not under investigation by special counsel. the tweet from the president was in response to the five
6:07 am
anonymous sources purportedly leaking information to "the washington post" about potential investigation of the president but the president as james comey said in his testimony and we know as of today, the president has not been and is not under investigation. >> democrats said over the weekend they felt the president was engaged in preemptive campaign to sort of discredit bob mueller, special counsel here is adam schiff over the weekend. >> what's happening here is the president wants to take down bob mueller, his lawyer wants to take down bob mueller, the question is why. i think the answer is they want to lay the foundation to discredit whatever bob mueller comes up with. they're essentially engaging in scorched earth litigation strategy, beginning with trying to discredit the prosecutor. >> meanwhile, the white house as all that is swirl around wants to focus on american innovation. a bunch of technology ceos coming to the white house today, including top names in the business we have a list here of just who
6:08 am
is going to be there today, including the ceo of master card, amazon, oracle, apple, kleiner perkins, intel, microsoft, ibm, google, the venture capitalist a close trump ally on the campaign trail will be at the white house today. this white house trying to focus on policy and technology today, even as all of the headlines swirl around them on the russian investigation. >> right he's so excited, this is just the beginning. russia, there's so much to investigate. so much to investigate peter lori was the little squirrel guy >> you remembered it did you google it? i was playing sound bites and you were googling. >> yeah. >> you confess. >> a russian guy, stalin guy i didn't know i was quoting last week, show me a man, i'll show
6:09 am
you a crime. looking for something on you i'm sure i can find something on you. anyway, don't go anywhere this week things are going to happen, i'm sure. >> technology stuff, health care potentially. >> this kind of stuff, this is -- >> going on for years. if you can go from a land deal to a stained blue dress. >> white water >> yeah, ask the clintons how they feel about the investigations as we said last week, this one is different, this is special counsel, not independent counsel. there's a difference in degree of authority that bob mueller has here it is not a ken starr situation, he can go as long as he wants, do whatever he wants, he will be restrained the other question is how frustrated is the president. we're seeing a lot of reports he
6:10 am
is in a firing frame of mind, might want to fire rod rosenstein or bob mueller, they're tempting tarkgets legally he can probably do that, politically would that be a wise thing. just feels like the president really wants to pull the trigger there. >> you keep saying that, you would want that, then you have your saturday night massacre, couple people resign, down the watergate path and then here's the impeachment at the end of that process. >> it is reading between the lines of the president's tweet friday when he said i'm being investigated by the man who told me -- >> how do you read between lines of this guy. tell me what covfefe is. how do you read between the lines of this guy. i wouldn't try it. >> he would show if you try that he is absolutely being implicitly critical of rod rosenstein >> guy that told me to fire him.
6:11 am
>> that's rod rosenstein and rod rosenstein is overseeing bob mueller. the president is being critical of his own department of justice and person who gave him the memo he said was key part of his decision making to fire james comey. when he puts that tweet out, he is criticizing his own department of justice. there's really political pressure on rod rosenstein we'll see how he handles it. >> did you read the article on next in line, i really like her, person that would take over -- >> rachel blade, is that her name >> yeah. >> she's like sided with the private sector on the previous -- i am ready for her i can't fire rod but i'm ready to bring her, elevate her up. >> what would she do >> i don't have a dog in this
6:12 am
fight. you can try to give me a dog, i don't have a dog >> all right we'll see you. i know you'll be around later this week. >> yep let's get to broader markets this morning joining us, jim o'sullivan, chief economist at u.s. economics and mark brand, chief strategist at hilltop securities mark, tell me what you think of the markets now. we are looking at new highs almost every timewe sit down. >> i did not say get out you said that. i said i had some strategy that we would have most of the run, still my opinion i said here in front of you and becky on november 8th and 9th, buy equities, i think a lot of that run is over i don't think we have another big move i suggested another strategy, which is buying corporate bonds, and then buying closed end bond
6:13 am
funds, getting a lock in yield of around 7, 7.5%. i think that's a decent albeit conservative strategy. biggest surprise is ten year treasury everybody and his brother said it would be 3% by now, i said i didn't think so. we are at 215 and may go lower for a lot of institutions, it has been a big pain. >> how long before we hit 3% on the tenure. >> no time soon. >> when you say no time soon, looking at 2018 or beyond? >> yeah, beyond. i just think that especially as mr. trump, president trump appoints new members to the fed, he has four to appoint, they're going to become more pragmatic, theoretical talk, economist theoretical talk about return to
6:14 am
normalcy, what does that mean. especially when we're trying to increase military, trying to build that infrastructure. we want to cut taxes and want to raise interest rates, toeltly mess up the economy. >> i don't expect another rate hike for this year >> how does that play into your thinking >> good morning. looks like the next tightening move from the fed in september will be balance sheet normalization. that was clearly the hint last week from fed chair. assuming the economy goes along okay, labor market remains solid, in september announce balance sheet normalization, consistent with the plan unveiled last week, then come back in december with another rate hike, proceed into 2018 with more rate hikes obviously assuming the economy is doing okay. >> what kind of issue will markets or economy have.
6:15 am
>> that remains to be seen they're assuming it is a pretty small deal they went from 1 trillion up to 4.5 trillion what they talk about first 12 months is to strengthen balance sheet by 300 billion, less than 10% of increase in the first place. their own internal estimates suggest 3.5 trillion increase that they put in place brought down ten year treasury yields by about 100 basis points if you do simple linear math, maybe push up ten year yields by ten basis points little effect of the equity market, that's with assumptions it goes smoothly, people don't overreact with a temper tantrum like 2013. the idea is it is modest tightening it is tightening over time it progresses, but not a huge amount of tightening at once. >> zoourdo you think the assumps are correct? >> no.
6:16 am
but you have the consensus, i feel when mr. trump appoints different people to the fed, assumptions we are making about current fed are not going to be valid going forward with these guys >> i mean, even assumption about what the impact would be from tightening the balance sheet, do you think that will have minimal impact? >> again, you have to address the question of whether they go through with balance sheet tightening. >> talk about appointing, goodwin would shrink the balance sheet even more. remains to be seen who he appoints as chair, could be one of two talked about as nominees. it is open whether he is going to make the fed more or less hawkish. two names floated so far, if anything would make it more hawkish, not less hawkish. >> i agree with that statement
6:17 am
the balance sheet statement has to do with as my friend said, $300 billion which is 7% out of the 4.5 trillion then it is a question of how they let it runoff the other thing having a big effect on the united states, and i know you never, joe never thinks anything effects the united states except the united states, what's happening with european central bank, japanese central bank >> i wish things elsewhere didn't effect us, as globalists and moving that way, everything has -- if cypress has currency fluctuation, fed can't move here. >> can't buy groceries. >> i can from amazon whole foods. >> they have effected, to the extent in the u.s. and europe,
6:18 am
europe, japan still going on, they're major factors. part of it is easy fed and part of it is global qe anything looks like toward the end of its run as well, that would also argue over time ten year yield should be going up. >> another year or longer before global banks start to reign it in. >> they're not about to do it in the morning, but closer to end of the process. >> mark, given all of that i don't understand why you don't think equities can't have more room to run if you look at incredibly low treasury rates makes stocks more attractive by comparison. >> what i said is they do have more room to run, they can run more the biggest part of the run, from president trump's election to now has taken place, so consequently i am seeing things in europe which i talked about that i talk about in "out of the
6:19 am
box. i have taken a slightly more conservative posture and i'm good with getting 7 to 7.5% on your money you're good there. you're not betting that's what you get from the moment you invest. money, that's a nice conservative strategy. i talked with a lot of major institutions about the strategy. and you know, they're interesting. that also like pension rates, get 7.5%, you can -- >> high for what people are normally looking at. >> exactly >> thank you very much mark is staying with us. jim, good to see you. >> good morning. thank you. top aviation executives are gathering in paris for annual air show, and phil lebeau, is it a homecoming, identify, caught up with their ceo moments ago.
6:20 am
>> reporter: we are here at the paris air show with the head of airbus commercial airplanes, on a day you're announcing a huge order with ge capital aviation for -- >> yes it is the third biggest customer ever >> a 320, despite some issues out there, ge will have ge engines on them, turned out to be more successful than people expected >> i think we can see more successful when we launch the product. we have already more than 5,000 new orders, 60% market share, this is the fastest ever successful program in commercial
6:21 am
aircraft history. >> but you have a big backlog of these and ramping up production. some production coming in alabama. how many of those a month are you building in alabama and if you increase production in the next couple years, does that mean more jobs, more hiring in alabama? >> yeah, sure. so at the end of year, four aircraft a month will go out of the assembly line, american customers are delighted. we are creating about 1,000 high skilled jobs in alabama. and we have potential to grow. >> meanwhile, behind us, the a380 we know the problems, you know the problems you're down to production of one per month. how long can that sustain before you make a business case decision on perhaps ending the program? >> everyone flew that wants to fly it again however, you're right. the market is hesitating because
6:22 am
it is a big aircraft it is seen as -- we ramp down to about one a month. as we market, double in size every 10 to 15 years, there would be potential in the next five to ten years. >> you need orders to sustain the program. >> that's right. we need to adjust to the market. we are in contact with some airlines this is why you can see behind me that we are trying to fans fie the cabin with more seats, improve performance. >> head of airbus commercial airplanes joining us at the paris air show, where they're seeing no slow down in international traffic in terms of people flying back to you. >> phil lebeau going to find out when we talk to him, i think live at 8.
6:23 am
exclusive interview with united technology ceo i don't know if he did 23 and me must be a place where he is now, la hamlet somewhere. >> have some relatives i thought he was french canadian >> remember hogan's heroes, lebeau >> you have such a memory. >> i'm just, i watched a lot of tv i'm an only child, remember that i was an only child. only adopted child up next. twitter milestone set by a pop superstar, details next. big interview later on cnbc, goldman saks ceo sitting down with jim cramer tonight at 6:00 p.m. eastern on "mad money. hey you've gotta see this. c'mon.
6:24 am
6:25 am
6:26 am
no. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. disney pixar "cars 3" raced to top spot at the box office.
6:27 am
this is the third installment in the cars franchise brought in $53 million the wares oporst open in the se history. >> i liked it. my son liked it. >> what about wally. >> second one they mailed it in. >> wally was weird they mailed in the second. >> oh, no. it was pixar it was good. >> "wonder woman" phil lebeau had a moment >> it was the, what was the car's name, the italian sports car. >> "wonder woman fe" fell to sed place, bringing in $40 million domestic total, 274 million.
6:28 am
that's huge. katy perry hitting a major internet milestone the pop star becoming the first to reach 100 million twitter followers. twitter releasing custom emoji in honor of that achievement justin beiber, barack obama, taylor swift, round up the top five must burn taylor when we come back, tech ceos gathering at the white house for the first meeting of president trump's technology council we will tell you what to expect next as we head to break, look at the last week s & p winners. ♪ ♪ my business was built with passion...
6:29 am
t growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
6:30 am
the power of innovative thinking. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. containing this information. read it carefully.
6:31 am
dearthere's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced. our senses awake. our hearts racing as one. i know this is sudden, come score set it free. see you around, giulia looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
6:32 am
♪ ♪ good morning, everybody. welcome back to "squawk box. let's take a look at the u.s. equity futures the dow futures up by 67 points above fair value s & p up by 7.5, nasdaq up by 34. on this week's economic agenda, wednesday we get existing home sales for may. on friday, new home sales. also look for first quarter
6:33 am
current account figures, they come out tomorrow. few notable names reporting earnings adobe and fedex out tomorrow oracle reports wednesday, bed bath and beyond comes thursday. it is tech week at the white house. ceos of some of the industry's biggest companies in washington for a meeting organized by jared kushner. among those expected to attend, ibm's ceo, apple ceo tim cook. a lot of meetings with president trump. i guess makes for good photo ops and the like he listens, i guess. >> maybe. >> and what type of positive things would you like to happen? >> i mean ultimately what i would like to see is tax reform. to the extent tech ceos can make their viewers known, the white house influences what ends up in
6:34 am
congress, that would be great. had meetings like this before, hasn't resulted inch yet clearly one of the top issues is immigration, on a different page than the president not sure how much they'll get done there i think they're all thinking better to be in the room than not. >> most tech ceos are proponents of illegal immigration. >> i think most tech ceo is would like to see visas increased. >> is that something trump doesn't want with h 1 vs >> i heard he has not been quoted on that maybe he hears from tech ceos today and will change his mind >> talking to the white house about tax reform, i don't know they probably would like to do it what do you suspect? >> i suspect they would. >> maybe you need tech ceos need to meet with congress. >> i suspect they should to get it done. seems like there's two paths it
6:35 am
could take, a complicated path hard to get through congress or something the house says if you want to keep the majority, pass tax reform lower rates by certain percentage, every bracket, plain van i will a get it through. i suspect the ceo would be happy. >> would that include bringing money back. >> every issue like repatriation makes it more complicated. if you believe tax cuts are important and b, without it, republicans have a hard time holding on to at least the house, then need to get the simplest bill through they can as quickly as possible to me it would argue reduce rates across the board, don't do anything else. >> there's regulation that effects not just energy companies, not just utilities. i guess there are regulations that hurt tech companies, too. has he helped there. >> i don't think he has done much to hurt what you haven't had are aggressive actions by federal agencies you may have seen the last administration looking to
6:36 am
say private tech companies, let's reaudit your books like the sec might be doing going to lending sector, saying we don't like what you're doing from that standpoint you haven't had the overreach you saw. >> what about net neutrality that's an issue that divides. >> it is like 50/50, depends who you are. >> telecom companies, they consider themselves tech companies, they very much like direction the president is going in if you're netflix, you have a different point of view. i don't think you see the room speak with one voice on this issue. >> you think when people go in, some of them are saying we have to go, i want to be in the room, but the president in the past, begged him not to leave paris, whatever, and he does what he wants anyway, right, but some of them aren't going to be there. ee lon must being, he had no vested interest in paris no means nothing. he's just worried about if he
6:37 am
flies on his jet, worried about the climate. >> i think most ceos probably recognize the president will do what he thinks is right, whether they agree with him or not i think they would rather be in the room than not. they'll have some other issue totally unrelated, when they want a phone call returned by someone in the white house, it is easier if you showed up in the meeting and participated. >> have you been >> i have not. >> do you know jared kushner >> just a little bit i think he genuinely wants to try to bring tech into government more. one thing they talked about is making government itself more efficient, more technologically savvy. that's a good thing. truman ka poet ee, good place to start, good intentions, hard to get through the bureaucracy. since jared kushner can make it easier to move technology forward faster, that would be great. >> some suspension led to tim cook and what would happen with
6:38 am
tim cook on encryption issues. that's something the president was not in favor of apple stance on. >> if you look at what's happening in england, seems like nonstop lately, i don't think he will have a sympathetic audience the president's views are strong on that. most americans agree with him on those issues i understand why tim cook feels that way, i don't blame him, he is representing his interests. >> but greater good of the country. >> i don't think you'll see a lot of people in that room speak up against that. >> the chinese government put in new laws june 1 if doing business in china, they want the code this is a huge national security issue. i heard from a couple of guys that are going to be in discussions. >> that's a place you look to your country to protect you. every company has had this difficult choice to constantly make about doing business in
6:39 am
china, you want to access the marketplace, but rules are tough. uber said let's sell that's a better outcome. others companies said we can't have this, we need the government to stand up, represent us >> thank you very much >> thanks for having me. >> great to see you. when we come back, our guest host at the top of the hour, georgia senator david perdue, talking about health care and taxes and where those stand in the senate. then a cabinet double play commerce secretary wilbur ross joins us with the british trade secretary, that's coming up at 7:30 at 8:40, energy secretary rick perry joins us to talk foreign investment in the united states. stay tuned you're watching "squawk box" here on cnbc ♪ ♪ since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities-
6:40 am
trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you. (upbeat dance music) (dance music abruptly stopping) (dance music starting then stopping) at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future.
6:41 am
how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
6:42 am
welcome back amazon announcing takeover of whole foods for $40 a share. now that the street had a few days to did i jest this. joining us, ed lee, recodes managing editor, cnbc contributor. on the retail side, mickey chand a, moody's's senior credit
6:43 am
officer, covering the whole foods company and specialty foods retailers as well. welcome to you both. mickey, start about talking what this did to other retail stocks friday when news came out. it was shocking seeing big grocery store companies, walmart pressured significantly by this. >> good morning. i think this transaction changes the landscape how you buy food primarily for the rest of the food retailers who are smaller can't withstand that pricing structure that amazon has with whole foods on them. across the board, a lot of pricing pressures are going to show up and that profitability lower for the rest of the space. >> you think what amazon is doing is stepping in and taking up whole foods, often called whole paychecks, going to take that food and bring down the price point for organic, wholesome food. >> whole foods has been doing that the last couple years
6:44 am
used to be the 800 pound gorilla in the space nobody else had the organic, natural product line whole foods had. everybody else started to encroach that territory. the peripheral customer that went to whole foods for good quality organic product started going to kroger or albertson's or walmart because everybody else had the product, they had to lower pricing to gain share and traffic. the traction is not good and then they had an activist shareholder that started demanding quick turnaround management said that's going to happen in 2018 shareholders are impatient amazon comes along, now the strategy for amazon is to use whole foods store base which is
6:45 am
actually attractive, good demographics, higher income demographics, well educated, more environmentally conscious, use those as distribution centers or warehouses to distribute. >> this is a lousy margin business to begin with only makes sense for amazon because of the idea they're using these as distribution centers, too in. >> it is a low margin business but whole foods margins are better than the rest of the grocers. >> so incredibly competitive had the kroger cfo on, it is like if i was a conglomerate owning a super market chain, i would sell that. it's already competitive now you bring this competitor in, even more competitive. besos is a genius, everything he does turns to gold is it possible that this is a business that isn't worth getting into right now >> well, you know, the big guys are going to be okay, kroger has flexibility and take that price
6:46 am
decline. >> if you had web services, were putting someone on mars, developing great tv shows, you would say next thing i want to do is go into grocery stores >> besos himself has done it personally with "the washington post." >> he also gets more and more -- we made a joke, there was a movie robocop, where there's one company left, i forget the name of it. they do everything amazon is getting damn close to that there will be s & p 1, not s&p 500, but will cost more and more to build this stuff out, hurts profitability, but that's how he has done it to this point. i guess he wants to control everything. >> he wants to super serve customers, it is not that he has another set to buy into, he has prime members, 60 or 70 million subscribers in the u.s., a way to serve them more he has a way to do that with whole foods, he will do it that's the key not just that there's another sector i want to win, it is i
6:47 am
need to get stuff faster to customers. if owning whole foods helps me do that. >> back to joe's point, it is like a company town mentality, we want to serve you everything you want any time. >> grocery doesn't work well with digital. >> not scaleable >> one brick and mortar that will be around. >> you have to be close to the customer to deliver food with the trend of eating healthier, more perishable product, you don't want it sitting out for six hours, there's shrink involved, spoil aj involved, you have to own that last mile, make that delivery worth your while. >> ed, is goal as prime member i can go on and say i want x, y and z from whole foods delivered to my doorstep today >> exactly not just that but stuff they sell as well for amazon, they see the challenge as even if i get to them in two days, that's not fast enough for customers. they can still go into the store, get it then and there
6:48 am
that's the part they're trying to close. >> that last gap. >> what do you think this will do to pharmaceutical companies >> well, when he gets into changes, so many aspects, not just squeezing margin on everything he wants to own the operating system for retail ultimately that's the best way to see this. i think longer term, longer long term, anyone selling anything, you have to rethink how you're going to do that >> to joe's point, who wants to be in the grocery business a consequence of this transaction will be that the number of players will shrink. you can't have regional operators that are 200 store guys or independent guys who have 15, 20 stores, they're getting squeezed by the walmart and costcos of the world, now amazon and whole foods of the world, so there's consolidation coming and there's going to be less choice or less number of grocery store operators out
6:49 am
there. >> very quickly, the media was lighting its hair on fire this weekend saying they would fire everybody at whole foods, aren't going to be employees left. >> we don't have reporting that shows that now if anything, what we have been told is they ultimately want to grow this. how they grow it and how quickly is up to question. they're going to squeeze margin elsewhere more immediately, but i don't think that's a near term goal for them. >> thank you both for your time. coming up, more from guest host mark grant. later, tracking health care with republican senator john barrasso as we head to break, quick check of what's happening in the european markets lot of 1% gains earlier, not quite but a pretty good session so far over there.
6:50 am
ray's always been different. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and.
6:51 am
6:52 am
the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
6:53 am
our guest host this hour is mark grant chief strategist at hilltop security so backdrop, mark, the lower 10-year seems to be, i mean, that growth projections are too -- or something. you think that's a reason for
6:54 am
your -- for you thinking there won't be another hike and that the fed is already going too much, even though we're at such a low rate already i mean it's barely cutting back on all this accommodation. and you think that that's the wrong move >> yes, i think it's totally the wrong move think of this a moment the fed is the central bank of the united states. and we have a president that says he wants to cut taxes he wants to build the infrastructure, he wants to increase our military spending and what does our central bank talking about? they're talking about increasing interest rates which could totally wreck the economy on the basis of some economic -- >> but with all the deficit spending it's going to eventually result in, you know, in the devaluation of the dollar, inflation, and everything else, you want to get ahead of that, wouldn't you? if you're going to do all the deficit spending and blow out the deficit with all these programs >> i don't see it as getting ahead of it, i see it as helping to cause it.
6:55 am
then on the other side what i said in my commentary, what i think we should be doing is taxing imported oil, giving tax credits for exported oil, giving tax credits for r&d in the shale oil fields and we can virtually balance the budget if not reduce the deficit, plus we put some of these opec rogue nations out of business, cut the money availablefor terrorism, and i think that's what we should be concentrating on, instead of talking about raising interest rates at a time when we're trying to -- it's all about oil and energy for you that's the way we -- >> well, it's a big part of the economy is oil and energy. >> and you think hydro carbons are here to stay >> look, i'm in favor like anybody else, of, you know, wind and solar and stuff but it makes that a little teeny part of what we need. >> natural gas for hydro carbons, you know, we may need to wait awhile before we go all-in, don't you think? all these subsidies and everything else? >> no, i think that that's what we should be doing now
6:56 am
because if we increase our oil, think of it this way for 50 years we've been held a hostage by these nations that have no respect for the way we live our lives. >> right >> they're supporting terrorism. we now have the opportunity for the first time in any of our lives to turn the tables, increase our production, and put these people out of business >> mark grant, thanks. what's that belt what is that thing >> cartier, what do you want >> eight >> 13. oh, it is. >> yes >> okay. >> we -- >> thank you >> great to see you. thanks for coming in >> my pleasure whee we come back our guest host for the next hour is republican senator david per due. he'll join us to talk health care negotiations and tax reform amd later wilbur ross and li fox will join us live from the select usa investment summit and now it's finally here.
6:57 am
the mercedes-benz summer event is back, with incredible offers on the mercedes-benz you've always longed for. but hurry, these shooting stars fly by fast. lease the c300 for $399 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of
6:58 am
death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit today to learn more.
6:59 am
7:00 am
business and politics collide. senator david puerdue joins us t talk about the trump agenda. investors kick off a new week with tax front and center. your trading day setup is straight ahead plus investing in america. commerce secretary wilbur ross and uk trade secretary liam fox join us in a first on cnbc interview. the second hour of "squawk box" begins right now ♪ live from the beating heart of business, new york city, this is "squawk box." good morning, welcome back
7:01 am
to "squawk box" here on cnbc live from the nasdaq marketsite in times square, i'm wilfored frost along with becky quick and joe kernen futures are ticking higher half a percent against the nasdaq it was the worst former last week, down about a percent the dow was higher by half a percent for the week and is up by 76 points in the premarket today. here's what's making headlines at this hour apple ceo tim cook and amazon ceo jeff bezos are among about a dozen tech leaders expected to convene at the white house for a tech summit today. the meeting comes just weeks after cook, microsoft, and twitter ceo jack dorsey raised objections to trump's decision to exit the paris climate deal and some election news out of europe, french president manuel macron's centrist party scoring a victory in yesterday's second round of parliamentary elections. macron's party now has a majority for campaign promises
7:02 am
and disney pixar's cars 3 raced to the top of the box office this weekend the third installment of the cars franchise brought in $53 million according to estimates that's the worst open in the series' history. it was also one of the lowest debut totals for the pixar brand. wonder woman fell to second place bringing in about $30 million. following a developing story out of london where a van plowed into a group of pedestrians outside a mosque one person was killed. ten people were injured. happened as worshippers were leaving evening prayers. metropolitan police say that the driver of that van was taken into custody, and they're treating the incident as a potential act of terrorism with wilf here, what was the name of the area, wilf i'm not -- >> it was in the north of london >> north of london >> yeah. and, you know, details still scant. the prime minister was just speaking at downing street moments ago and again reiterated there's been too much tolerance for extremism in this country. extremism any time, whether it
7:03 am
was -- >> so even -- >> whether it was terrorist driven or the other way around we don't actually have specific details on that yet. but, listen, fourth attack in four months. it's become a worrying trend in the uk and certainly top of the agenda on people's minds >> in the meantime, google says that it is creating new policies to try and suppress terrorism related videos the company says that it's going to be using technology to identify extremist videos across its sites, including on youtube. boosting the number of people who screen for terrorism related content. social media and search sites have been under pressure by governments to quickly identify and remove posts by terrorist groups turning to the economic agenda, the housing focus this week on wednesday may existing home sales and on friday new home sales look for current account figures tomorrow fedex out tomorrow bed, bath and beyond on thursday also, bank stress test results on wednesday, something to focus
7:04 am
on >> for the latest on the gop policy agenda let's welcome our guest host for the hour senator david perdue republican of georgia who served on the armed services, banking, agriculture and budget committees, and a 7 handicap is that too low? >> no. don't go there don't go there, joe. >> and you like the ceos that have to have a 25 handicap or shareholders -- your shareholders get mad >> we won't get there. >> but you're pretty good. i've seen that swing anyway, you're in the group, are you not, that is discussing some of the ways to do obamacare in the senate or do you just hear about what's happening? >> i wasn't one of the 13 that was name but we have a lot of people who sit in and i've sat in on all of them over the last few months. very to tell you we're making progress i'm more hopeful now than i've been in a long time we're actually going to get a bill, get a vote from the floor. >> can you tell us what's going on or would you have to kill us first? >> no. but i think there's still some differences. and that's not what you want to
7:05 am
debate what i think you're going to see us focus on is access. right now we've got over 1100 counties in the country that are down to one health care. in my state we have 156 counties down to one carrier. we're going to focus on medicaid we've got to make sure medicaid is sustainable in the long-term. we've got to get after premium costs. that's easy to do and we have ways to do that right now. last we've got to make sure that we get at the pre-existing condition. we make sure that nobody who has pre-existing conditions will not be able to have access to health care >> are you writing off -- >> i'm not writing off anybody i think we've got 52 people that are genuinely trying to get to yes. >> this is a big entitlement increase the senate version. that's what you're going to hear from conservatives >> this is my biggest concern. we've got three drivers of our debt over the next ten years we're going to add to the current baseline budget says we'll add $10 trillion to the
7:06 am
$20 trillion debt today. most of that is social security, medicare and medicaid. social security trust funds go to zero in less than 15 years. we've got to reach out and save those promise and here we have an opportunity to reengineer medicaid that's why this is taking some time >> is that a tough message to deliver to voters today? people are pretty fed up with austerity. how do you sell the kind of cutting in spending and funding of entitlements in a time when people are fed up with it? >> well, in less than 14 years, somebody in washington is going to have to tell those same people that the trust funds have now gone to zero over their watch. i think that's a much more difficult conversation to have look we have sat here in the last eight years, borrowed 35% of what we spent as a federal government that means that every dime we spend on the military, on the v.a., and every dime we spend on domestic nonmandatory programs is borrowed money. >> outside of the health care bill is president trump fiscally conservative enough? are you concerned about the extent of some of his tax cuts or the extent of some of his
7:07 am
infrastructure spending? >> any time you go into a turnaround it's messy and you have to invest in order to grow long-term. he said job one is growing the economy. i support that he's focused on regulatory reform and focused on tax reform pr we're actually in the middle of one of the larger regulatory reforms in my lifetime, honestly and we're trying earnestly to get the tax as soon as we can so we can stimulate this economy and get it going again >> senator, let's go back to health care. you said something very interesting just about your state and others that are looking at obamacare where there's only one provider. >> yeah. >> in lots and lots of counties. anthem pulled out of ohio. that was big news. they said at the time part of it was because they couldn't make any money because so many people were coming in who were sick than were healthy. the other part is the uncertainty, not knowing what's going to happen with health care and finding that a possibility as you figure out how to set rates for 2018 mitch mcconnell said he wants to bring this bill to a vote before the july fourth recess you think that happens >> i do.
7:08 am
i think we're moving there we're much closer than we've been in the past this is a crisis that's unfolding brf our very eyes. obamacare was predicted four years ago to collapse and here it is right now collapsing it's not just that virginia, tennessee, iowa, and now we heard ohio, they're facing severe challenges with regard to coverage in the individual arket. but here's the problem the individual market, the way that obamacare set it up, was never going to work. it was a mathematical problem. all the people who needed health care could go and get health care and drop off, and oh, by the way, if they got sick again -- >> it's not enough of a penalty to maintain it -- >> exactly and the second thing is young kids do not sign up. 48 million people did not have insurance before the acap today 28 million still do not have insurance in mark. >> right >> another 20 million that got it during this period of time, 16 got it because of the expansion of medicaid. only 4 million people got insurance because of obamacare and of those, many of those are like me that had their insurance cancel and had to re-sign up under the exchange
7:09 am
>> the -- i think about how our forefathers designed everything. it's hard to do things but everything you're trying to do seems like there's a catch-22 involved with it i guess is good because it's hard, you know, we've got filibusters, and you've got to do this through reconciliation so, to get it so that it passes muster for reconciliation, are you talking now about keeping obamacare taxes, or keeping them longer in the discussions that you're hearing about now >> yeah, i think what we're talking about is i hear that there's a phase-out, phase-in of the changes in obamacare i think that's certainly necessary. took us six years to get here, took them two years to put it together in the first place. joe, one of the problems that i have is a ceo looking at this thing, the solutions are right here before us the problem is getting it through the political disfunction in washington. so we're sitting here. we just confirmed a supreme court justice by changing the rules of the senate. if we can't get things done in the senate, then i, for one, am open to a conversation -- >> really? that would make it easier.
7:10 am
because you also now, you're not a border adjustment guy. >> no. >> so it's going to be now people are saying it's not going to be tax reform it's going to be a tax cut because that's all that is going to be able to be accomplished through reconciliation once again, because you can't pay for it unless you do that border -- >> but you don't have to make it permanent either, joe. the border adjustment tax, i'm embarrassed that we're even still talking about that >> -- still said that -- >> well now that the opportunity for them now is to we'll phase it in. the problem with that is it's still a bad program, no matter what we saw it in europe, it doesn't work it doesn't create a level playing field and it's a regressive tax on the very people this president's trying to help. and the people who got him elected the working middle-class and the working poor look i hope we're going to have tax reform the tax expenditure side of our equation is just as messed up as the rates are. so when you look at different industries, and when i was at dollar general for example my tax rate was above 35% at reback it was below 25%
7:11 am
so you can see a great disparity just here. other countries have already lowered their corporate tax rate most of them have done that. some of them even had the v. tancht like london. they reduced from 30 to 20 right now they're in a mode of changing it to 18 as well. so this is something that we've got to get at this year. >> target is in fact, 17 by 2022 for the uk >> thank you >> in terms of how things -- how quickly we can get on to tha even though there are question marks about it, if we did get the july vote in health care, how quickly can tax come to the fore >> you still have to have a budget for '18 i sound like a political wonk here but this is what they tell me you have to have an fy-18 budget, reconciliation is part of that. then you can get into the conversation about tax reform. just like we did with fy-17. gries let me warn you. we only have about let's see i think it's 37 days left, work days left, before the end of this fiscal year before the federal government is
7:12 am
not funded and we've only funded the fed four times in the last 42 years according to the '74 budget act. so we're heading for a continuing resolution unless we do something extraordinary that means that you won't even get to tax until the third or fourth quarter >> so if -- when you look at where the country was when obamacare was passed, i don't remember how long ago it was, we didn't know how the public was going to -- whether it would become used to obamacare or not, there has been a shift in the five or six, whatever, how long, four, five, six years. so there are some people now that are more -- i think that these numbers have risen probably to 50% or -- >> public opinion polls. >> public opinion where they're, you know, you can't take away, that's what they knew and they did it democrats, you can't take away an entitlement once you give it. but there's still a contingent in the republican party that seems to think that you can do like almost a clean repeal and
7:13 am
that there's not going to be consequences for that. do you -- >> and they're back in the house so no matter what bill -- >> can you send something back to the house with -- we're back to talking about whether you're going to expand entitlements when you've got guys over there that, will they vote for something, a kinder, gentler senate version of the bill >> in 2008 we had major problems with health care in the united states you could lose your insurance. if you were with an employer and had group insurance and you had an illness, they could kick you off your insurance if you're an individual got healthy because you really were vulnerable then. and you know, under republican leadership between 2000 and 2008, there was no fix for that. so we had to get at. the second thing is if you look at the access that individuals have, we had plenty of choices then, we have minimal choices now in terms of programs that's what happened to the premiums one of the big drivers of premiums i hopeful whatever we do in the senate is going to address some of the imbalances that we saw in the house. when it goes back to the house i think we'll get that passed. >> simply because they're going to have to have something done
7:14 am
or they're not going to get re-elected >> here's the reality. something's going to happen to obamacare. you either do it in a sweeping program or you end up fixing the accessibility. sooner or later you're going to see millions of people in the individual market not have access this year >> and they're all going to be up for election. >> access versus coverage is something that, when you explain it to someone, you understand that coverage in that 24 million number that the democrats use, when they're scoring this, saying those people are going to lose, you have the cbo, they're the ones that make political -- you just know that there's going to be individuals an ek doteal evidence that someone with a disability that loses medicaid and there's going to be -- it's not going to be an easy fix whatsoever to take anything away at this point. >> no, it's not. and -- >> and there's political consequences >> there's four words i'm using in washington now and i haven't heard them in my lifetime there and that is we cannot afford it.
7:15 am
in the next ten years we're going to borrow another 30% to 35% of what we spend as a federal government that means all discretionary spending is borrowed the runaway expense in our next ten years is all on the mandatory side so this is something that we've got to address as a country is decide what we can afford you can't afford to provide for security in america, and provide for the safety net long-term programs that we have that are exploding before us. >> senator those numbers you just quoted where does that assume interest rates are? >> well, less than 3%. if you look at the 10-year number and what we've just seen last week, thank you for bringing that up, we had a quarter point increase nobody ever talked about that last week with the other news of the day obviously. but what that means is we had four increases that's 100 basis points over the last 18 months what that means is that we're spending $200 billion more in interest now than we were just two years ago. now here's the real -- we -- our bond portfolio, 60% of the maturities of our bonds are three years or less. that's outrageous.
7:16 am
we've had eight years all of zero interest rates and nobody went long? and so what you see is other countries like the uk, 48% of their bond portfolio is 20 years or longer. this is insanity >> locking in low interest rates. >> absolutely. but what happens now is we'll be seeing these new higher interest rates rool on immediately. >> senator, stick around i think we've almost -- we've almost got obamacare and tax reform done. by 8:00 i think we'll have a couple more conversations -- >> that was a productive ten minutes. >> you did great thanks we're -- wilf you ready? >> i'm ready >> so we're going to do a hard brexit and obamacare and tax reform got it all done. >> i want to talk more as well about the funding of the debt market as well i think there's more to discuss on that topic. i agree. finance. >> yeah. >> when we come back we're going to do more talking about market strategy, as well. and take a look at the futures they've been higher all morning
7:17 am
long dow futures up by about 75 points s&p futures up by 8.5. the nasdaq up by 37. also at 7:30 eastern time this morning commerce secretary wilbur ross will join us along with uk international trade secretary liam fox "squawk box" will be right back. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
7:18 am
we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
7:19 am
and at $4.95, you can trade with a clear advantage. yogig-speed you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids. and these guys. him. ah. oh hello- that lady. these houses! yes, yes and yes. and don't forget about them. uh huh. sure. still yes! you can get it too. welcome to the party. introducing gig-speed internet from xfinity. finally, gig for your neighborhood too.
7:20 am
we're back to "squawk box. joining us now is david leff covit, senior strategist for wealth management resources. thank you very much for joining us we're going to start with the tech sector because the nasdaq was down last week but rebounding in the futures market today. does that suggest to you that the weakness we've seen recently in tech stocks is a buying opportunity, as opposed to a warning sign of incomes? >> i think so. i don't think we've seen any change in fundamentals we look at earnings growth for the tech sector. it looks very healthy. earnings revisions look very healthy. corporations are starting to make more money. that's a big end market for the tech sector when companies have more money to spend, they typically do spend that on technology, and those types of products and services. and secular growth looks very good in the cloud, and in their areas so i think everything looks pretty good. and valuations are really not at all troubling. they're a little bit higher than average. but nowhere near where we saw
7:21 am
them in the late '90s so i do think this is just a bit of a rotation in the market and looks like a bit of opportunity. >> one of the beneficiaries of that rotation have been banks. there hasn't been a catalyst for why banks and financial stocks have picked up stress test coming this week is that a concern for you? >> i do think people are starting to focus more on the deregulatory agenda a little bit. so we do get the stress test results. i think that could be a little bit of a catalyst. but there's still a lot more to go on that front we still have a lot of personnel to get put in place at the different agencies that oversee the financial services industry. and i think you'll see a lot more catalyst. plus the 10-year now i mean interest rates are a big deal. >> right >> so the 10-year is kind of at the low end of the range that, you know, we think is at the low end of this range and probably likely even higher and also the fed just raised interest rates and that's positive for banks so i think there's a couple of
7:22 am
catalysts that should be coming down the pike. >> in terms of the rotation that we mentioned already, energy is doing all right again. oil prices rebounding. the oil price weakness we've seen recently is that for buying opportunities for that sector as well or are you concerned about oil pricing? >> yeah, we like oil well we like energy stocks you know, here i do think you're going to have to take a bill lit longer-term perspective. obviously what's been weighing on the markets so far this year has been the fact that u.s. production has been a lot better than expected. now that being said if you look at investment spending in the global energy sector, it still is very low relative to what we need in order to maintain adequate supplies over time. so, i think it's more of a question of when, not if and we're eventually going to see these oil markets tighten up there's a lot of focus on the u.s., and u.s. production. but if you look outside the united states, we're really not seeing any type of investment spending so, eventually we're going to see those production declines,
7:23 am
these wealth depletes when you don't invest in them, we're going to see some production declines come down the pike, especially in non-opec, non-u.s. that's going to tighten up the oil markets and oil prices should be higher over time >> thanks very much for joining us >> thank you very much >> and coming up, commerce secretary wilbur ross will join us in a first on cnbc interview. then later senator john barrasso is our guest plus united technologies ceo greg hayes will be live from the paris air ow quk x"s mi rhtsh back it's all yours. wow! record time. ♪ at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living.
7:24 am
honey? you almost done? nope. ♪ get ready, because we're helping leading companies lead with digital.
7:25 am
7:26 am
♪ welcome back brooks koepka winning the u.s. open it really was a near flawless final round. koepka finished 16 under par, best ever, for his first major championship 27-year-old. took home $2.2 million that's the largest single-day earnings in golf and you've heard him say -- he said i'm not a golf nut. he played baseball most of his life he's a true athlete.
7:27 am
he was at the gym before he went out and won that but he just bombs it but then the putts he hit on the back nine were unbelievable. he just kept -- he laughed at everybody else i thought -- i thought when hideki put up that 12 under i thought that was going to be something to worry about he was in the clubhouse. but, wasn't even close >> looks like a defensive safety to me. >> how about that swing? he bombs it. how about his touch on the greens, too? i don't think -- anyway. we'll be right bac k.
7:28 am
k. at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.
7:29 am
7:30 am
good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square among the stories front and center activityist investor investment management building a 3.3% stake in hudson's bay its real estate is worth four times the current stock price. mattress maker casper plans to
7:31 am
announce it's raised $170 million. "the new york times" says the investment is being met by target yesterday target began selling casper mattresses, sheets and more in its stores and on its website. google says it's creating new policy to suppress terrorism related videos the company says it will use technology to identify extremist videos across its sites including youtube and boosting the number of people who screen for terrorism related content. social media and search sites have been under pressure from governments to quickly identify and remove posts by terrorist groups we are speaking to senator david perdue, republican of georgia, who serves on the armed services, banking, and bumate committees he's with us for the next half an hour. senator perdue, wanted to switch the conversation a little bit to the banking era. of course you sit on that committee. what do you make of the treasury's announcement around the aims of its deregulatory path >> we've been asking that question for a few years for $4.5 trillion that's the largest balance sheet the fed's ever had i met with the chairman, chairman yellen, just a few
7:32 am
weeks ago and she was talking about the potential of restructuring. they're looking to move that down to 2.5 trillion by 2020 i welcome that but i also am concerned about the fragility of our markets right now. we're just in this turnaround. consumer confidence is up, ceo confidence is up so i'm hopeful that they'll be able to do that in a very balanced way >> would you keep janet yellen at the fed >> oh, that's above my pay grade. she has a couple more years in there, doesn't she >> till february but it's something -- do you think that's a -- i mean more broadly for the regulatory environment there's so many posts that still need to be filled before we get to see action would you like to see that move quicker? >> this is the biggest challenge we have right now with the federal government is getting these second and third tier people in their jobs getting them confirmed and getting them in their jobs but we have a situation right now in the world where we have $200 trillion of debt. only $60 trillion of that is sovereign debt and we have a third of that. and so what the fed's got to be very careful with is balancing the unemployment number, which they're focused on, and also the
7:33 am
growth right now in the economy which is job one for this president. so you can anticipate a potential conflict there in the near future between the administration pushing growth, and the fed trying to get their balance sheet in order >> and have you gotten polls on this race that's going to happen tomorrow on the congressional race do you know -- what's your prediction on -- >> it's very close i don't think anybody really knows at this point. i don't trust polls in a district race like this. certainly i don't trust polls in most of these last-minute numbers that you see coming out. i think it's going to be very close. it depends on the republican turnout at this point. >> i mean, this is a really red area i mean, this always goes republican >> well, this district was newt gingrich, you know, tom price, johnny isakson, and hopefully, karen handle but we've got a situation right now, national issues at play here and there's a lot of
7:34 am
money -- it's unbelievable for a district -- >> moderated his approach, too he's not acting like a bernie sanders democrat, like he's almost acting like he's a republican now >> well he has not criticized president trump. he's been nicer to president trump than some republicans in washington here, frankly but, i think it has been very, little conversation about the real difference in this race do you want nancy pelosi to have another vote or do you want to give the president an opportunity to push this agenda, get the economy going? >> normally, we sent andrew down to georgia, the swing state, you remember that? andrew, you know, georgia, the swing state, instead of going to -- but hillary was going to texas and arizona because she was going to -- >> i was there >> she skipped wisconsin went to texas and arizona. >> i think we did breakfast one morning with andrew at the o.k. cafe -- >> you did that's where andrew, no matter how much you wish, georgia is not a swing state. go -- better spent, you know, better served somewhere else you're going to be here for a
7:35 am
little bit longer, right >> yeah. >> let me ask you about this horrific thing last week >> yeah. >> i mean -- he's a security you have no security, do you we don't need to talk about it but this is scary, what's happening. >> well, we remind you that the vitriol and the angst out here in america is really serious and we've got to take it up. i'm really concerned i think this has gotten to the point now where we need to address it we are very secure in the senate as long as our capitol i think we're somewhat vulnerable as you saw last week. thank goodness scalise was there with his detail. but i think we are in a vulnerable position outside the safety net of that capitol >> i know. all right. well we may have a chance to talk more. i know we have some important stuff. we've got wilbur ross. senator, thanks, stick around with us. oh -- you want to say -- >> no. >> wilf saying >> you're great -- >> you're good at saying
7:36 am
wilfred thanks you, too. the sincerity of the english coming up commerce secretary wilbur ross joins us along with uk international trade secretary. you know this guy, liam fox? >> i don't know him personally i'm well prepared and looking forward to it. >> i know you are. and then later united technologies ceo greg hayes, live we'll be right back. uh huh. i switched to t-mobile, kept my phone everything on it oh, they even paid it off! wow! yeah, it's nice that every bad decision doesn't have to be permanent! now you can ditch verizon but keep your phone. we'll even pay it off when you switch to t-mobile.
7:37 am
7:38 am
you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if there was a single site where you could find the right hotel for you at the best price? there is. because tripadvisor now compares prices from over 200 booking sites... save you up to 30%... ...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices.
7:39 am
welcome back to "squawk box," everybody. the futures this morning have been indicated higher all morning long right now dow futures up by almost 80 points before fair value. s&p futures up bring just over nine points. the nasdaq up by 40. commerce secretary wilbur ross is hosting the 2017 select usa investment summit. this is a conference that promotes and facilitates business investment in the united states. he joins us right now, along with liam fox, who is the united kingdom's secretary for state for international trade, and gentlemen, welcome to both of you. >> good to be on, becky. >> secretary ross, let's talk about this conference. this is the most high profile foreign direct investment conferences since 2011 i think it's represented about $23 billion in investment in the
7:40 am
united states. which is tens of thousands of jobs so what do you hope to accomplish today >> well, today we have 2,800 attendees, including, which is a record, including the record delegation of 155 from china, and 132 from japan so all together 64 nations are being represented here, and we hope this will be a record-breaking dollar amount of commitments that will get made so we're off to a very, very good start >> lay out the case that you would be making to these other countries as to why this is a good place to invest >> well, it's the same reasons as it should be great for american companies to invest we're lowering taxes we're cutting regulations. we're stimulating the workforce, helping to develop the workforce of the future, unleashing our
7:41 am
energy resources, and redoing our trade agreement. that's the whole package that president trump was elected on, and it's the whole package that's driven the stock market to $4 trillion of gains since the election >> secretary ross, i wanted to ask a little bit about your priorities with trade deals in terms of who is top and bottom of the list. president trump famously said during the brexit campaign the uk would be bottom of the list how high up is the uk in terms of your priorities relative to china and after renegotiation? >> well, it's very high up and i think it's symbolized by the fact that secretary fox has made this his first overseas trip since the recent election traditionally, the secretary would go after election to australia, new zealand, to places like that he's honored us by coming to this conference first.
7:42 am
that shows you the mutual interlocking between the uk and the u.s., and the mutual importance each side puts on the relationship >> trade secretary fox, thanks for joining us, good morning to you, as well i mean, what is the point of your current trip? because eu law restricts you from starting trade negotiations until britain's actually left the european union have you broken those laws >> negotiations is one thing, actual trade is another. trade and services last year between the united states and the uk was about $250 billion. and that was up 8% on the year before which is remarkable given the slowdown in the rates of growth in global trade. we also are future investors the united states is the biggest investor in terms of fti in the uk and the uk is the biggest investor in terms of fti in the united states. we each employ through our companies about 1 million people in one another's country
7:43 am
so what happens in the united states, the business conditions here, and also what's happening in the united kingdom, are of enormous mutual importance, and i wanted to take the advantage of the very kind invitation by secretary ross to be able to spend time here discussing with him and his colleagues, as well as investors from overseas because the point that you make why do people want to invest in the united states is the same as why do people want to invest in the united kingdom we have a rule of law that provides stability and security for investments. we have low regulation, low taxation economies we have good skills base, cutting edge research base these are the reasons that will attract investment to us in the future >> as the commerce secretary ross just said this is your first trip since the recent uk election an election widely described as catastrophic for your party, for theresa may, and the conservative government. do you feel weaker and undermined compared to before the election, the majority smaller, your authority
7:44 am
therefore to deliver softer than it was previously? >> well, what's very important is that we continue to develop confidence for investors and that's to set out the type of economy we're going to have and also to point out that what we have in common as governments is our understanding of the need to create wealth it's not just about growth and spending, the next generation's money today. it's about how you actually create wealth by taking the ip from an individual and turning into a good or a service that doesn't exist today, and it's that culture i think which is hugely important and that's what will provide our long-term prosperity and that's really the basis of this conference today >> secretary fox, secretary ross pointed out that one of the things that they're kind of laying out the reason for investing in the united states, a big part of that, is going to be lower taxes now that is certainly high on the president's agenda but it has to work its way through the political process to get to that point. how much do you hear from uk companies in terms of where that
7:45 am
ranks in importance on their list of what they would like to see before they make additional investments or new investments >> well, what companies look for is stability but if companies are able to invest in an environment where they can make money and the money can be moved and the money can be kept, they provide the key conditions for that. of course, in the united kingdom, we're taking the same path, we're reducing our corporation tax down to 17% by 2020 and so i think there's a common understanding here that if we want to get investment we've got to create the conditions for investment and regulation and taxation will be a very important part of that >> secretary ross, how pleased are you to see secretary fox returned to his position as international trade secretary, and sitting next to you there, will negotiations with him be easier than it would have been under a labor socialist government under jeremy corbin >> well, i can't speak for
7:46 am
mr. corbyn, neither can secretary fox, so, i can't even imagine what those negotiations would be like. i think these negotiations would get off to a good start, and more importantly, will have a happy finish >> secretary ross a question from senator perdue. >> secretary ross, first of all i'm delighted to see twou together at that great convenient 2800 people attending is terribly encouraging i just have a quick question how important is it to this burgeoning turnaround here, where ceo confidence is a 15-year high what happens to that if congress can, indeed, come to grips with this tax reform that we're addressing today >> well, i think in many ways the single most important thing that president donald trump is achieving is the regulatory unwind the amount of red tape that's been cut out is celebrated by every single ceo that comes to visit with me.
7:47 am
because that's what's been strangling this country. as you probably remember, in the last two years of the obama administration something like 7,000 new rules and regulations were put in. do you really think the u.s. was such a wild and woolly place a couple years ago that we needed 7,000 more rules and regulations? i don't think so and i think it simply symbolizes the difference in attitude our attitude is, governments should be a facilitator, not an inhibitor. >> secretary ross -- excuse me, secretary fox, given that the u.s. is likely to deregulate financial services in the years ahead, will london have to react in kind? and will we see a sort of global race to the bottom for deregulation if london is going to continue to be a significant financial center, particularly in light of the threats that brexit might bring to london
7:48 am
>>ist not the number of regulations that necessarily matter but whether they're the right regulations. whether they're good regulations. whether they add to stability in the market and confidence of investors. and the ease of doing business so i think that we need to look at the regulations we have and see what is necessary for an effective functioning market, and what is superfluous and what are those regulations we put in place that were never needed at all. >> and secretary fox, in terms of the fallout of the election, how confident are you that prime minister theresa may will still be leading your party and the government by the end of this parliament >> i'm very confident in the prime minister and i think that she has the confidence of the parliamentary party. we met last week as a parliamentary group and she was cheered from a speech that she gave and i think she continues to have the full confidence of the parliamentary party. and i think that there is no one else that i can see who would provide anything like that leadership at a threatened time.
7:49 am
>> secretary ross just very quickly, if there is a industry that you are most looking to attract to the united states, what would that be >> well the industries of the future the high tech people, the internet people, the artificial intelligence people. those are where a lot of the future will be but we're certainly not going to neglect the historic industry. as you know, we have section 232, investigations coming to an end on both steel and aluminum so we're not giving up the ground on any of our historic but we must look forward to the growth engines of the future >> secretary ross, secretary fox, want to thank you both for your time this morning we appreciate it >> well, thank you for having us on, becky. >> still to come here on "squawk box," the last word from senator david perdue and in the next hour, senator john barrasso joins us, also
7:50 am
check out futures pointing higher the nasdaq bouncing back from a soft week last week is up by 41 points the dow by 78. who's the new guy? they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms.
7:51 am
7:52 am
our guest host this hour has been senator david perdue, back to yellen, quickly about that $2.5 trillion balance sheet, senator and i think when you, you know, when you say it's above your pay
7:53 am
grade i think it's below -- that's an expression, too. this is below your pay grade, really dollar general and reebok, right? i mean if you're going to be honest >> well, the secretary is very interesting. she believes we have full employment now i take issue with that with all the part-time workers out there. but clearly she's got to address this balance sheet japan, china, and the eu all have similarly large balance sheets around $4.5 to $5 trillion this was stimulative over the last five or six years but it really didn't have much impact so now that you have the beginning of a turnaround here in america, the question is, is will it be inflationary if we continue to have that large a balance sheet. >> she mentioned -- >> specifically said -- >> not in my conversation, no. these are things that have been reported here in the last few days but if you do the math, at $50 billion a month over 2.5 years, you get there. >> all right other than tax reform and obamacare, those are the key
7:54 am
things we didn't really push on infrastructure -- >> i think one of the things that has not been talked about in the last few days, that got lost in the noise last week is secretary mnuchin said something that was very profound last week in the budget committee hearing. i asked him, i said if you were king for a day, would you repeal dodd-frank he said well first i would change the budget process. but inside his department he's going to change rules potentially that will address some 70% of the dodd-frank rules. so i think that was big news, and we'll talk more about that, you know, in the coming days >> but that -- >> don't waste your fire power >> that can't come until we get through the hurtles of health care and tax reform. >> he's talking about things the department is doing right now in the treasury as you start work for next year, if we can get tax done this year, health care done this year, we've got to start addressing the mandatory side of our expenses >> hmm and you think something -- how many balls can you keep in the air at one time?
7:55 am
you think infrastructure is something that's going to be done this year >> well, i don't think if we do things legislatively, i know it's very important to the president, very important in this turnaround, he's got to find a way to pay for it >> treasury secretary mnuchin has said he would like to see the debt ceiling raised before everyone goes away for summer recess is that what you would like to see? >> i totally agree we have some 36, 37 days left until the end of this fiscal year we have a debt ceiling to deal with by the way there are a number of us that are saying we just don't see the number of days left in the year as being adequate so we have a five-week work period that we go back to the states and travel and work if we don't get this done we ought to stay here for a few weeks and focus on getting priorities done. >> you're saying starting with the july fourth recess or in august >> in august >> so the president has outside lawyers, vice president pence has outside lawyers. how do you see this progressing? every day --i mean the leaks still come every day there seems to be the political enemies that president
7:56 am
trump are going to keep this in the forefront. >> he's been a different candidate, right he's a different president this is not somebody from the washington establishment washington looks at this guy through their lens the rest of the country is looking at him through their lens now the vitriol. the energy around this agreement, has got to change we saw last week an event that's just tragic. nobody wants that in america, or anywhere that's unacceptable no matter what your politics are so we as a body in the united states senate, i believe, need to focus on what we can do to focus on what we agree on. last week johnny isakson had a bipartisan lunch you know how many times we've done that since i was in the united states senate maybe three or four times. we've got to find a way to break this gridlock in the senate. >> senator thank you for all the time you gave us today >> enjoy it guys, thanks >> when we come back, senator john barrasso on health care and tax reform and then the deals in the sky. we're going to head to the paris air show where major defense companies are showing off their latest and greatest. we'll be hearing from united
7:57 am
technologies ceo greg hayes. "squawk box" will be right back.
7:58 am
7:59 am
your muscles look good, but we should be seeing more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies lead with digital.
8:00 am
one "squawk box" newsmaker -- >> we're lowering taxes. we're cutting regulations. we're stimulating the workforce. >> to another. a first on cnbc interview with energy secretary rick perry straight ahead >> a checkup on health care reform we'll talk to one of the leading senators writing the bill. dr. john barrasso. >> plus jets, planes, and drones we're live at the paris air show with united technologies ceo greg hayes as the final hour of "squawk box" takes flight right now. ♪ live from the most powerful city in the world, new york, this is "squawk box. good morning welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square, i'm joe kernen along with becky quick and wilfred frost. andrew is off today. the futures are higher and have been strong all morning up almost 80 points.
8:01 am
new highs. nasdaq indicated also sharply higher up almost 42 points and the s&p up nearly 9. treasury yields. 210, 220 area recently this morning is no different 2.146. let's get you caught up with the head line the at this hour landon buildings investment managements is launching an activist campaign with hudson's bay. the activist taking a 4.3% stake in the retailer. "the wall street journal" reports london buildings will say that its real estate is worth four times the current stock price. and in washington president trump's american technology will be holding its first meeting at the white house today. senior executives from apple, facebook and google are all expected to attend the council was established by the president last month and will focus on modernizing government technology and increasing cybersecurity measures
8:02 am
eqt is buying rice energy. the transaction is expected to close in the fourth quarter. also following developing story out of london. a van plowed into a group of pedestrians outside of a mosque killing one person and injuring 10 others. metropolitan police are treating the incident as a potential act of terrorism british prime minister theresa may making a statement on the attack earlier this morning. >> this morning, our country woke to news of another terrorist on the streets of our capital city the second this month, and every bit as sickening as those which have come before >> the driver of that van has been taken into custody. >> right now politics, senate majority leader mitch mcconnell says he wants to vote on a health care reform bill before the july 4th holiday joining us now on set senator john barrasso. he's played a key role in writing the health care bill how much of the comments that we
8:03 am
saw from senator perdue. did you hear most of that? >> i did i think they were great questions. i think his answers were absolutely right the pain of obamacare is getting worse on the american people we're seeing costs continue to grow up and projections of even higher next year fewer choices. over the weekend more companies are pulling out saying they can't write insurance into these markets. people are left with one choice or no choices around the country. so we have to do something it's a rescue operation. we have 52 republican senators, all wanting to get to yes to find a solution. i believe we're going to vote before the july fourth recess. >> you do? so we asked some questions that senator perdue didn't necessarily know the answer to do you know whether obamacare taxes are going to stay longer than in the house bill because of the reconciliation process? >> the goal is to eliminate all the taxes, ultimately, immediately get rid of all the taxes that increase the cost of premium. health insurance tax, medical device tax, tax on prescription
8:04 am
medicine so -- >> is that different from the house bill so that they'd stay longner this bill? >> on high income individuals, they may end up having to stay longer just because of the way the reconciliation rules work. my goal is to eliminate all the taxes from -- >> down the road >> yes >> when the president said that the house bill was too mean, what is changing in the senate bill to address the president's concerns there >> i think what the president was talking about is he was saying i'm happy that the senate is writing their own bill, and what we're talking about doing is with the medicaid expansion, you know, medicaid originally was for the disabled and for women and children those people, the last hour you talked about, they're still on waiting lists in many states because the expansion wasn't to help any of them the expansion was for able-bodied, working-age individuals. who are low income that's not what medicaid was about. so in many of the states that
8:05 am
have expanded medicaid we cannot as a country continue to afford this huge trillion dollar a year expansion of medicaid and we're trying to make a glide path slowly from the expansion. not eliminating, but for those states that have expanded medicaid >> there are both republican and democratic governors who have been opposed to the bill that passed in the house, and what they are hearing about the senate bill at this point. because they're concerned it puts too much of a cost back on the states that they're going to be scrambling for ways to pay for all of this. what do you say to those governors? >> that i always felt when i was in the wyoming legislature that if we had the same amount of money, without the rules and regulations and one size fits all coming out of washington, we could have helped a lot more people in a lot better ways than trying to do it under washington's way so to give the states that flexibility, and that authority, that i think they are created to the point where they're going to be able to make sure that more people are actually helped by medicaid, rather than this one size fits all that really
8:06 am
doesn't work for many people >> how will -- you can't speak for rand paul obviously but how will the real talks or the deficit hawks view the senate legislation, both you've got problems in the senate, getting to 52, and then back in the house when it goes back there. how will they view this in terms of the bill they wrote, because they had to write it a certain way to get those guys on board is this going to be so far left of that that we're back to square one getting those guys on board? >> we all know -- we all know we have to do something, because of the collapsing of obamacare. right now it is in this -- >> they knew that the first time they wouldn't vote for it, too, though, remember how hard that was like pulling treat to get those freedom guys on it >> so the issue of the taxes you raise, there are many people that would like to relimb nature all the taxes immediately. i don't know that that can practically be done but that's part of the discussions. but no one has yet walked away from the table as senator perdue said in the last hour, many,
8:07 am
many of the senators are atte attending all of these meeting and just on friday, chuck schumer, the democratic leader, wrote to senator mcconnell saying let's see if we can find some bipartisan solutions. because what he said in his letter is that insurance today is not affordable or accessible. i want people to get the care they need. i'm a doctor from the doctor they choose, at lower costs, that's what i hear about in wyoming i heard about it this weekend in wyoming. so yeah, we want to get rid of the individual mandate we want to get rid of all of the taxes. and we want to find a way for those states that did expand medicaid, that they're not at a disadvantage but for states like mine in wyoming that did not expand medicaid, that we're not held at a disadvantage for that. you want something that will work for everyone and that's the challenge of finding the solutions here >> so bottom line, how confident are you that this does get to a vote before july >> i am absolutely committed to do it. i'm confident there will be a vote before july recess and i'm doing everything i can to make sure it passes >> can i switch very quickly and ask you because you recently had a trip to china, you pret with
8:08 am
premier li there how are -- how is the new administration going down in china and what was the response from premier li? >> it was a very good productive meeting. they just opened the markets to beef imports in china, exports from the united states that's a big thing in wyoming. our number one cash crop is beef but it was a productive meeting but of course president xi had just been with president trump in mar-a-lago. that was productive. you know there are lots of areas where we have overlapping interests with china and others where we have diverging interests in china the south china sea we diverge areas where there's overlapping there's the issue of north korea. and i think that china is now changing their position on north korea because of the threat it is to them and they realize that it's in their best interest, not necessarily just ours, but in their best interest to have the korean peninsula without nuclear weapons. >> the other thing that a lot of republicans would like is a way to really drive premiums down, and that wasn't -- that was another thing that the freedom
8:09 am
caucus didn't think was solid enough and some of the versions in the house how does this compare to the senate version >> the issue you hear about is how much more expensive obamacare is the premiums have doubled in the last four years and the numbers are going to go up even more next year. there are a couple of ways you can do it. senator susan collins from maine talks about how successful their high risk pool was but it has to be adequately funded and we have more money in the process to do that, because 55% of the health care costs, or about 5% of the people so if you can help those people have coverage in a different way, that can lower premiums for everyone across the board otherwise. so that's a solution but you have to make sure there's enough money for the high risk pools. >> so i mean, at this point, it would pass reconciliation, you think, and it would hold down premiums, and do certain things for medicare if you send it back to these guys in the house, what do you think they're going to say about it >> well, i've met with the house
8:10 am
leadership last week they've had a lot of, you know, stress in the house as a result of the shooting this past week when i met with them before that they're working with us. they want a solution, too. they're hearing at home every weekend we can't live under obamacare. it is collapsing and we have to rescue folks who have been trapped by this. so, they're realistic about the significant risks -- >> looking at it, you saw how the cbo scored, the 24 million still going to be 24 million is that going to be the political football that the media throws around and that the democrats throw around i mean you heard the rhetoric on the house bill are you going to get the same rhetoric on the senate bill that your grandma's going off the cliff? disabled people aren't going to be able to get medicaid, and i mean, it's -- >> by the way, i've already heard that -- >> i'm sure. >> right now, about a third of doctors don't take new medicaid patients, so putting more people onto medicaid doesn't actually help that person >> they're covered but they can't get access >> so but they're counted under
8:11 am
obamacare. the thing that's interesting, you asked me this last time i was about about head line risk which is this. so the cbo kind of the actuaries who look at the numbers say if you eliminate the individual mandate which we plan to do which is the most hated part of this where the government says you have to buy the government approved product, most of those people that no longer have insurance, that's because of their decision to not buy something that they view as not valuable to them >> right >> so they say the first year 14 million fewer people will be insured, but it's primarily because you've eliminated the mandate. >> what about the -- here's another story that i've heard, not only from news reports that i've heard but also from therapists that i've talked to about this, say that things that states provide funding for right now, something like for autistic adults, who need a little help, can't do things by themselves, they have programs that help them during the day to try to get more independent and do things like that state funds that are used for things like that right now will
8:12 am
probably be cut, because when you are faced with the prospect of having to fund all of these other mandatory issues that are coming back at you, something's got to give somewhere and there's big concern that some of those programs that are incredibly worthy programs that are helping people who are either disabled or have disabilities, during the day that that's the type of stuff that will get stripped out what do you say to those concerns >> you want to make sure people get what they need and i think if you give the states the flexibility to do that, with that same number of dollars, they can make those dollars go a lot further and get better things done for people who live there you know, if you talk to most governors, the biggest impact on their budget is either education or health care it's one or two. and every dollar you spend on the one, you don't have to spend on the other but that's why medicaid initially was a shared program, and when obamacare expanded, it went to 100% of full funding, but not for the disabled or the elderly or the children, just for those new people coming on who are the able bodied working age adults
8:13 am
i think they expanded it, obamacare did, in the wrong way. there were other people that could have been helped better. >> today's the 19th. >> yes, it is. >> when are we going to see something? i mean -- >> you've got a week >> july fourth, really when are we going to see something? >> there's going to be plenty of time to see it and read it because under reconciliation, this bill is fully amendable on the floor. there may be 50, 60, 70 amendment votes, likely to be a week -- >> you need a score before you can vote on it >> the cbo has that right now. the folks that look at the numbers. but it's all these -- what we're discussing now, is how many years one paper's down, gives a smooth landing to the medicaid expansion. what the multiplier is for the consumer price index for escalation but everything's got to spend more money these aren't actual cuts to the program. they're how fast are they allowed to grow. those are all numbers that you dial in in trying to find a, as you say, a score
8:14 am
but the cbo has these numbers already. >> does it have to be by next friday, though >> a week from now, yeah a week from friday >> would you -- >> that's what i meant >> you advise vice president pence to stick around for the vote >> he has been very intrickly involved in all the sessions -- >> he may need to be there >> he was at the white house meeting with the president last week and went to capitol hill to meet with committee as a whole with all the republican senatorsize been very active -- >> as governor -- >> i wonder if you got enough, you might lose rand paul >> he'll be there. he's not leaving town until we get this done. >> tell pence to stick around. >> the beauty of mike pence is he was the governor indiana. and the innovative things he did with medicaid, if we could do that in every state it would be much better for the patients as well as the bottom line. >> a big hour still ahead on "squawk box. sky high at the paris air show united technologies ceo greg hayes is there he'll join us live right after this break plus americans sound off on the trump economy. steve liesman has all the numbers from the all-america
8:15 am
economic survey. we'll bring you the results. and later another "squawk box" newsmaker energy secretary rick perry talks energy innovation and putting money to work in the u.s. 8:40 there eastern time. st tedoue tcng "squawk box" on cnbc (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings)
8:16 am
8:17 am
8:18 am
the biggest names in aerospace are gathering at the paris air show phil lebeau is there he's joined by a special guest phil, over to you. >> thank you, will fred. joined by greg hayes chairman and ceo of united technologies this is one of those shows where once the focus tends to be more on the military side which positions well for pratt whitney, doesn't it? >> absolutely. first of all, thanks for having us back. last year we talked about brexit the year before that it was the gear turbo fan we're going to talk about military which is a great story for the pratt business >> how much more demand are you noticing in terms of conversation, in terms of potential orders out there >> i think what we're seeing is really the -- the backlog starting to grow in the military side as we mentioned with pratt whitney, we have content on the joint strike fighter, of course, we also have the new bomber, as well as the tanker, so pratt is well positioned, 25% of their
8:19 am
future revenue is going to come from the military side we're seeing nothing but upside there. >> yet when you talk about pratt whitney so many people focus on the commercial side. the gear turbo fan continues to have what some would call teething problems. others would say larger problems especially with regard to the airbus orders, and the a320. what's the status of things right now? >> actually we had an investor conference this morning. we talked a lot about that the fact is we had a couple of issues that we've discovered in service. i think that the two things that i would point out is 99.8% in service reliability. so the plane, the engines are working. and the fact is, we've got 8,400 engines in backlog so strong customer desire to get the engines out there and they're delivering what we committed to which is the 16% fuel burn and 50% lower noise. >> with regard to the airbus models parked around waiting for engines, how quickly does that get resolved >> so we have committed to airbus this year to get back on schedule by the end of the year we expect we'll meet our contractual commitments with
8:20 am
airbus and we'll build about 350 to 400 engines this year. that's up from 140 last year next year we'll build somewhere between 700 and 800 engines, and we'll go up above 1,000 the following year early in the program end of the year we'll have 158 planes out there but the engine works, and the gear most importantly, works exactly as what we'd expect it to do. >> this is the first time we've had a chance to talk since earlier this year when we were so busy with president trump, and what was happening in terms of the carrier plant in indianapolis what did you take away from that and how has that changed how you as a company interact with the administration >> first of all, let me say, you know, the indianapolis situation was difficult. i think, you know, we came to an agreement with the new trump administration in terms of saving 800 jobs in indianapolis and keeping the plant open, and we've kept that commitment unfortunately we also continue to remove some jobs out as we had expected to do so no surprise in what's going on in indianapolis i think that what we found is
8:21 am
that the administration will listen we can have a conversation in washington today with the white house, be it with the vice president, or with the president's staff and they will actually listen and take our advice and take our input and that's something we haven't seen in awhile. >> and with regards to the jobs being phased out, some of those notices have gone out fairly recently here and there seems to be this story that's circulating online people saying well here you go they're phasing out those jobs and what was told earlier this year is not accurate but that's not the point, is it? you've made it clear nothing's changed. >> nothing has changed since last november with the agreement to keep the 800 jobs in indianapolis, to keep the factory in indianapolis open it's unfortunate we have to provide these warn notices, because we'll be laying off a number of people i think the good news is there's plenty of jobs out there we're going to be hiring something like 5,000 people this year we've got factory jobs across the country. and we're offering those jobs to the folks in indianapolis that are impacted by this >> greg hayes, chairman and ceo of united technologies, joining us here at the paris air show. we got this in when there wasn't
8:22 am
a fighter jet flying over. >> phil, thank you very much we priesh it when we come back, youtube is stepping up its game as a competition for content. we'll get an inside look at how the video platform is taking on traditional television "squawk box" will be right back.
8:23 am
8:24 am
8:25 am
welcome back to "squawk box. uber is losing some ground after the competition. the ride hailing giant's share of the u.s. market sliding from 84% to 77% last month according to a report by research firm second measure this comes after a series of scandals at the company, and the announcement that ceo travis kalanick was taking a leave of absence. we're going to get one more commercial in here go to break and then we'll come back to one of the 8:30 hour we're going to talk about the results are in we have exclusive data from all the athletes from cnbc's all-american economic survey. what these guys thinking the line backers, the defensive ends, the quarterbacks where are they putting their money now? those numbers next did i say it -- economists or
8:26 am
people -- liesman's here we head to break, take a look at s.quy tus.
8:27 am
8:28 am
8:29 am
good morning welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square i would have had this tweet from the president eight seconds after he tweeted but we were at break but i have it and it's less than two minutes now. the president says, the dems want to stop tax cuts, comma, god health care and border security their obamacare is dead, with 100% increases in ps, which i think is probably premiums, and then he ends with, not a sad, or a frustrated, he ends with vote now for karen h. >> in georgia. >> we talked to senator david perdue from georgia about that >> he crammed it all in -- >> all in to one i'm waiting to see if there's another one. but that was just right now that was three minutes ago. among the other stories front
8:30 am
and center, valeant says that the board has elected john paulson to serve as director john paulson, of course, of paulson and company, valeant's largest shareholder. got about 5.7% of the shares outstanding. and blue apron holdings says it expects its ipo to be priced at $15 to $17 a share this would give the meal kit delivery company a valuation as high as $3.2 billion a company of pharma stocks, clovis oncology are on the rise after a test of the company's ovarian drug, ovarian cancer drug showed similar efficacy to a competing drug these drug belong to a closely watched class of new medicines called parp inhibitors and the results could help and differentiate it from rivals we mentioned tesaro. those shares are down on the news some months after the
8:31 am
election americans weigh in on the economy and the outlook for their wages and their hopes. senior economics reporter steve liesman joins us with the exclusive cnbc all-america survey >> economic optimism remains strong as the post election bump continues and it's even strengthening. the percentage of americans who are optimistic about the current situation, and optimistic about the future, at a record 30%. spurred by surging public optimism, and democratic pessimism that sparked below republican levels during the obama years. you can look at this chart kind of optimism flattened out -- oh, move on to the next one here anyway, behind this optimism, the percentage of americans who think their home prices will rise in the next year is at a record the percentages you see higher wages is at a near record, 54% of americans think their home price will increase in the next year but this is not necessarily good news for the president few americans who have a positive outlook say it's because of the president, and more americans who have a negative outlook pin it on
8:32 am
donald trump and this is what we reported last week the results declining approval rating of the president for 37%. president trump's approval on the economy is better at 41% but these numbers are down a bit from april, and now are negative we have the full story, the full poll online on tomorrow we're going to be talking to charlie evans, the chicago fed president. >> oh, great >> in "squawk on the street" actually >> when you see the kind of -- >> i can tell you -- >> when you see like consumer confidence data, retail sales, does that conflict with this type of survey data you're getting at >> no, this is right in line with it. what we do is different from what everybody else does, we look at some of the reasons for it people think they're wages are going to go up, they tend to be better spenders rather than just somebody who says oh, i'm optimistic about the economy but if i'm optimistic about my income stream, about my asset stream, then i'm going to be more optimistic consumer i think. but it's interesting, it's continued. what was interesting about that one chart was that optimism
8:33 am
leveled out during the last years of the obama administration but pessimism tend to fall and clearly when donald trump was elected, there's a continued decline of pessimism, and a rise in optimism there's that last chart right there you can see it flattened out. 21%, 20% of those who are optimistic now and for the future while pessimism seems to fall, and now you have this surge in optimism, which comes from republicans becoming very optimistic, and democrats don't become, at least not yet, as pessimistic as republicans were during the obama years >> okay. not really athletes. i'm getting some tweets that who gives a rat's patootie about where all-american athletes are putting their money. so i lost that, because of what i -- my joking around. >> you completely undermined the survey, which we've been working on for ten years by the way, the company you work for, joe, spends a lot of money gathering this data, which is just the same as a national poll by the way, joe, it's conducted by the same people who do the
8:34 am
nbc/"wall street journal" poll and we share data with them. i mean you might as well be dissing hoffman on there you don't think -- because they put lots of money behind this and it's a 10-year thing it's sort of a trade mark and a brand joe for the company that pays your salary >> is it just football is it basketball -- the all-americans, is it all sports? >> when you hit it in the back left part of the head it has the most effect? >> volleyball, american -- >> i think you're walking into the same brick wall again. >> is it golf? all-americans? >> what should i do, becky >> ignore it >> ignore it >> just keep going i'm very proud of our survey >> we get all american -- >> we get -- >> the reason we name it all-america was because people had a hard time understanding that cnbc wasn't just polling people off the street. >> okay, okay. that's the last comment. no more. >> steve you haven't figured out that by getting all ruffled you make it all the more enticing for him to do it >> not all americans >> i have a problem with my brother over many years as well.
8:35 am
>> your big brother? >> little brother. >> that whole university of michigan, that's not -- >> that's not just -- >> it's not just the students. university of michigan because they're mad -- >> go online full survey is there, all the results. if you'd like to read about what 800 americans across the country feel about the economy, the president and all kinds of other issues also we have questions about blue apron and food on there and the stock market >> seriously >> we asked about automation and food, online ordering. >> which i see a lot -- >> bulking up. >> there's no way to avoid it, becky. >> nope, nope. thank you, steve >> i wish you well and joe. >> i was going to say, what about me thanks >> all right, folks, youtube viewers watch 1 billion videos a day across desktop and mobile but in this age of increased content competition the company has to balance the needs of its community of home grown talents, established stars and high paying advertisers joining us right now is
8:36 am
executive editor of fast company. the magazine took a look at youtube's evolving brand strategy in the july issue, and noah, this is a really interesting story right now, because there is so much attention being paid to youtube. they have so many people who are coming on. they've got a big chunk of advertising dollars that are coming in, too but to get to the next level, they have a lot of issues. >> that's right. starting at about march a few advertisers really got up in arms because they noticed that their advertisements were being shown next to content that was not favorable, often hate speech, sometimes even terrorism speech so just today, youtube and google announced a series of changes that they're making to improve that problem one of the oddest things they're doing is applying machine learning and artificial intelligence to this that's an area where they see a lot of growth. they'll be able to put warnings up in front of a lot of these videos and also ensure that no advertising is being shown around those videos. they're also going to work with a bunch of nongovernmental agencies to define what is hate speech, what is problematic speech and frienlly also working with a company called jigsaw which is a really fantastic
8:37 am
group. they actually target advertising to people who are being recruited by terrorists. and they try to basically catch them before they actually get recruited. and change their mind. >> what do you mean target advertising? >> so they use advertising the same way that you get advertising if you go look at a pair of shoes online and then suddenly you see that advertisement, right they're using people who they know are watching these videos and targeting ads to them that will help them change their mind about -- >> they're using people who are looking at like isis propaganda? >> yeah, that and -- >> why don't they just block it? >> why haven't they blocked it, what do you mean block the propaganda already >> why are they continuing to post stuff and say not only are we going to post it, we're going to target advertising around it so we make money around it why don't they say we're not going to let it go up on site. >> that's a great question part of the problem is how to find it and define it. as you said people are not only watching a billion hours a day of video on youtube. but there's about an hour of new video being uploaded every minute to youtube. so the --
8:38 am
>> and if it is an impossible task, this is sissiveous trying to -- >> and it's also, different people have different ideas of what constitutes a problem, which is part of the reason they're bringing in these nongovernmental agencies to help them decide what video someone in the middle east has a different idea of what is an offensive video than someone in the united states, right so globally, how are they going to determine which videos should be taken off, or which video needs to not have advertising, and which -- >> what you just described makes me feel even that it's less likely that they're going to be able to get their arms around this and make it an advertising safe haven >> yeah. well, i think that's their challenge, but what i will also say, one of the things that youtube says is the things that make youtube different from tv are also its strengths it doesn't have that same top-down control that you see on the broadcast networks but it's got this massive, you know, influx of people who are uploading content all the time it does really well among 18 to 34-year-olds it owns the mobile space really
8:39 am
effectively. and they are making moves to go main stream now with things like youtube red, and they've got a cord cutter's bundle for $35 a month. so they're moving main stream. >> with that attempt to be more main stream original content are they most likely to have success, drama or news or sports >> food videos definitely food. but look you can rent movies they're going for original programming now so i think you're going to see youtube like net flex and amazon and even we're hearing about apple getting into original programming. you're going to see youtube try to stake the stars that it has grown on its platform and turn them into main stream stars that maybe have a movie, or are, you know, doing original programming just for youtube that people pay for like on youtube red for $9.99 a month or they've als got exclusives, you know, through their own hollywood sort of system that they're building. >> is apple ahead of them in this race? because apple tv has put an app on an actual television. does that make a big difference? >> yeah.
8:40 am
>> with that advantage is apple in fact been slow to develop it further? >> yeah, well i think apple has been slow but you're right that also youtube lags when it comes to tv viewing. so whereas netflix and amazon have done extremely well on tv, youtube has not made the same effort and that's where susan is spending a lot of her time now is try to figure out how to make that move on -- in to your living room. they need to get in your living room youtube does great on the mobile phone but they don't do great in the living room. apple also does great on the mobile phone, needs to get it more into the living room with apple tv and original programming. they're both in some ways chasing amazon and netflix to get in there >> in general all of the traditional broadcasters is this just another worry for all of them that competition, the cost for content is going to continue to rise? >> yeah, not only the cost for content. what you're seeing is a shifting of ad dollars, you know, into these platforms and away from traditional tv so when youtube, you know, right now we have the advertising festival, and you know, they're going to be there, talking to the same advertisers who are traditionally going to the tv
8:41 am
networks to advertise. and they're going to be taking those dollars away >> what do you think about amazon's move to buy whole foods? >> yeah i mean obviously huge move for them. and one of the things that i think points to is the prime, you know, service which is the flywheel, that subscription service which jeff bezos called the flywheel of amazon whole foods is in affluent communities that is already likely to have a prime membership so this gives them access to make sure they retain those prime members as well as attract new ones once they have a prime member, those people buy more from them. this is a great way for them to move into those neighborhoods and continue to establish prime. >> do you think that's just still focused on grocery delivery in the u.s. for now because mercado in london is up about 9% today on thoughts they could also potentially take them out the uk's biggest food delivery company >> this is not just a u.s. move for amazon jeff bezos has global ambitions. never underestimate his ambition he is in tokyo, london, paris,
8:42 am
he's moving all over the world with grocery delivery. basically anywhere where they have a fulfillment center they can easily tack on a grocery delivery to it whether it's through prime now or amazon fresh. so i think you're going to see major moves including word is now that they're about to get approval in india to start delivering food in new delhi which would be a big market for them, obviously. >> noah, thank you >> thank you >> by the way, suggest that a lot of people would like this guy wants to know, where do plumbers typically invest? the survey -- >> is that the survey steve came up with? >> yeah. >> utility companies >> i mean i would like to know we could do a whole series of plumbing -- where's joe the plumber? what does he do? does he like bonds does he like growth stocks >> apple >> etfs? >> apple >> i just think steve, more air time anyway we talk to -- we talk to -- just athletes.
8:43 am
although we care we talk to commerce secretary nlbur ross earlier. upext another cap net member will be here, energy secretary rick perry yep, i know. he's now - i think we should do that meeting tomorrow. well wait. what did you think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies lead with digital.
8:44 am
the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
8:45 am
in the five months since he took office, president trump has talked up american coal mining, he's green lit the keystone xl pipeline and pulled the u.s. out of the paris climate agreement joining us now from the select
8:46 am
usa investment summit the man at the forefront of the u.s. energy issues, energy secretary rick perry. used to call him governor all the time been on the show so many times mr. secretary, we'll call you now. it's great to see you. thanks for being with us >> thank you, joe. >> you know, i look at the renaissance over the past, let's call it, ten years in the energy industry, and maybe it wouldn't have been -- maybe it deserved closing, when you were talking about it, mr. secretary, back then but now, i mean, things change this is one of the growth industries, and manufacturing renaissance industries in the united states, and i would be excited to be secretary, too, and i think you are. >> very true and it's always good to keep people on their toes as we go through this budget process obviously, you know, president trump is looking to deal with the deficit that we've got it's reflected in his budget
8:47 am
and the good news from his perspective and i hope from americans' perspective is that as governor of texas i dealt with some pretty big dollars before, managing the 14th -- or i should say the 12th largest economy in the world for 14 years. and we're going to bring that same management style to the department of energy, making it efficient. making it effective and promoting. interestingly when i had my job interview with president-elect trump he leaned across the table and said here's what i want you to do. i want you to do for american energy what you did for texas. i want us not to just be energy independent. i want us to be energy dominant. >> a lot of ways to go, in terms of what we decide to try to cede and to spend money on, mr. secretary. i'm just wondering, some of the budgetary cuts are going to come
8:48 am
in renewables or whatever you want to call it, clean energy. there's something to be said for the renaissance in natural gas in the renaissance in fracking and horizontal drilling, which really might have pushed out the economic competitive nature of a lot of these alternative energies and is that one of the reasons that funding is being cut on some of these other programs >> well it's interesting what you bring up ten years ago, twelve years ago, there was a fellow traveling around the country talking about peak oil we found all the oil he didn't give us any ideas about what we were going to but he said fossil fuels are done. well, they were wrong. and i think again, it's going to be the innovation at our national labs, working with the private sector that comes up with even, you know, ideas about energy, sources of energy, that we may not have a knowledge about. if you're a clean energy
8:49 am
individual, which you know, donald trump is. i am we're in all of the above approach to energy, nuclear power is going to be a -- a very important part of that so bringing our nuclear energy back, small mad u lar reactors, for instance, that's just on the front burner, so to speak. we're not necessarily going to be cutting a bunch of programs out in totality. what we're going to be looking alooking at these agency functions, what can be consolidated, how do you get rid of duplicative efforts i've done this before with the state of texas that's what we're going to do there. i know there's a lot of people standing on the sidelines saying oh, they're going to get rid of clean energy i just got back from china and the clean energy ministerial, interestingly, on the way there, donald trump made his announcement about paris perfect timing from my
8:50 am
perspective where i could stand up in front of 20-plus leaders from around the world, from energy departments, and ministries, and say america's not backing away from being a leader in clean energy we've led the world in the reduction in clean energy we've led the world in emissions. we just happen to think the paris accord was a bad deal for m america. donald trump said not good for america, we're not going there the more important message from my perspective, america is going to continue to lead in emission reduction and in clean energy innovation >> what about experts, particularly of lng. is that a big opportunity for the u.s. or is it more about self-sufficiency >> 12 years ago we were working
8:51 am
hard for many port we had the first shipments going into the netherlands, just ten days ago while we were at the clean energy ministerial in china. so lng, great opportunity. i talked to the european energy minister just yesterday. they are very interested in lng. if you want to clean up the environment, you shift from older, inefficient plants to these natural gas burning plants it's what we did in texas and we saw emissions go down drastically. i think we led the country in emissions, we had almost a 20% reduction in co2 during the years i was governor america can lead this renaissance off energy and create a huge amount of jobs,
8:52 am
which is what we'll be talking about in foreign direct investment in about 30 minutes at the conference that wilbur ross is overseeing >> it point's pointed out that epa, that talking about co2, emissions, toxic sites, maybe that didn't get quite the attention of toxic waste clean-ups. when scott pruitt was on, i asked him whether he believed that co2 was the primary control knob for climate you've mentioned co2 a couple of times. do you believe co2 is the prime rif control knob for the temperature of the earth and the climate? >> most likely the primary control knob is the ocean waters and the environment that we live in this shouldn't be a debate about
8:53 am
is the climate changing, is man having an effect on it yeah, we are the question should be, you know, just how much and what are the policy changes that we need to make to effect that the idea that science is absolutely settled and if you don't believe it's settled you're somehow or other a neanderthal, that is so inappropriate from my perspective. i think if you're going to be a wise, intellectually engaged person, being a skeptic about some of these issues is quite all right. the point is are we begin to continue to have innovation that helps effect in a positive way our environment? absolutely i'm excited about what we're going to see coming out of our private labs, working in concert with public and private sector opportunities. >> all right, mr. secretary, pretty good answer that you gave
8:54 am
there. i think you're going to be fine with that. you really got to be careful you're right, you do i don't know what the actual penalty is for not believing i think you do get -- it's heretical, i know that, if you're a denier. i know that, mr. secretary >> when we return, jim cramer will join us live. lloyd blankfein will be on "mad money. (dance music)
8:55 am
(large boat honking) ♪ i'm living that yacht life life life life ♪ top speed fifty knots life ♪ on the caribbean seas ♪ it's a champagne and models potpourri ♪ on my yacht made of cuban mahogany ♪ gany, gany, gany ♪ watch this hey dad, come meet the new guy. the new guy? what new guy? i hired some help. he really knows his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy.
8:56 am
what do you think? not bad.
8:57 am
all right, that's it, wolfe, thanks as f t rorheest of you, hopefully you'll join us tomorrow "squawk on the street" is next
8:58 am
are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think.
8:59 am
visit and keep your lifestyle healthy. aflac!
9:00 am
♪ good monday morning, welcome to "squawk on the street." premarket steady positive. fallout from the amazon whole food deals, europe is up macron wins the majority in a parliament oil is steady. our road map


info Stream Only

Uploaded by TV Archive on